Weekly Market Update (Jun 06, 2026)
HIGHLIGHTS
The equity market has lost some momentum this week. The ECB is expected to hike rates next week.
- Economic Data: Recent data indicate strength in labor demand, supported by gains in jobs and job postings. Rates are not as restrictive as expected.
- Japan: Bank of Japan officials are turning more hawkish, showing clear concern about the risk of falling behind the curve. Markets are expecting a rate hike in June.
- AI: Demand for AI tokens has continued to exceed supply amid several years of large investment in AI capital expenditure.
MARKETS
| Nasdaq | 25,709.43 | -4.68% |
| S&P 500 | 7,383.74 | -2.59% |
| Dow | 50,866.78 | -0.32% |
| 10-Year | 4.53% | +8bps |
| Brent | 93.09 | +2.16% |
| DXY | 100.07 | +1.14% |
*Data as of market close. 5-day change ending on Friday.
VIEW FROM THE STREET
Equity
UBS: We expect continued AI adoption and economic growth to drive S&P500 earnings per share growth of 20% this year. Sustained AI demand would support further equity gains.
Goldman Sachs: The equity market has rallied sharply over the past few weeks. Markets have started to question the sustainability of the run. Several indicators suggest that the current market is still not close to dot-com bubble conditions.
Fixed Income
Morgan Stanley: 2Y yields are hovering near 4%, meaning the flattening of 2Y/10Y is less about long-term inflation and more about near-term stagflation. The 10Y real rate is still around 2%, suggesting that the higher-for-longer regime is likely to remain.
Goldman Sachs: We do not expect a rate cut this year and have delayed expectations for the final two rate cuts to June and December 2027. We still think a rate hike is unlikely, even though Fed commentary has turned more hawkish. Inflation from the war has not broadened out, and the labor market remains in good shape.
Economy
UBS: The key source of market volatility is still uncertainty around the Strait of Hormuz, which affects energy flows. The US-Iran deal remains in limbo.
Standard Chartered: US payroll and inflation data will be the next catalysts for the economy. Given recent economic data, we expect the Fed to stay on hold for now.